Shares sank around the world and Italy’s bond yields leapt as the prospect of
political chaos in a euro area country carrying more than €2 trillion (£1.7
trillion) of public debt shook markets.

The implied cost of borrowing on Italy’s ten-year bonds rose to 4.8 per cent
from 4.44 per cent yesterday, leaving it trading at the highest level since
last November. Spanish yields also jumped to the highest levels since late
last year, trading at 5.45 per cent.

Banks led the stock market decline in Milan, while in London the FTSE 100
index slid by 1.4 per cent, leaving